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MLP fined £100k for pension and endowment sales failings

German IFA giant MLP&#39s foray into the UK market suffered a setback last week when its London subsidiary was fined £100,000 for regulatory failings.

The FSA slapped the fine on MLP Private Finance, citing weaknesses in the training, monitoring and supervision of its investment staff which led to inappropriate sales of mortgage endowments and pensions between February and June 2001.

The FSA said MLP&#39s plans for growth in the UK market meant it should have made sure its procedures, systems and controls were of the highest quality before launching.

MLP removed former managing director Dorian Simon who was responsible for its launch in September 2001, replacing him with Dirk Bohsen.

The company, a household name in Germany with 2,000 advisers and 220 branches across Europe, saw its share price fall to £4.83 last week compared with £54.62 in March 2002.

FSA managing director (regulatory processes and risk) Carol Sergeant says: “All firms, no matter how experienced they are in their home markets, must ensure that their selling practices are specifically tailored to meet the needs of their UK customers in the context of the UK market.

“MLP failed to research UK regulatory standards thoroughly and as a result did not establish and implement appropriate compliance systems before commencing operations.”

Bohsen says: “When you come to the UK from continental Europe it is a different world. There is much more regulation than in Germany and the Netherlands, for example.

“We have changed our whole approach since the mistakes were made.”

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